“Why are you doing this, Mommy?”
I have spent most of my working life devoted to the development of a sustainable planet, so perhaps I should have expected this teary-eyed question from my eleven-year-old.
After all, I had just told him that I was considering joining the board of an oil and gas company. In his eyes, it seemed to be a betrayal of the work I had so proudly accomplished since before he was born.
And therein lies the rub: As a world that still depends on fossil fuels for 80%[1] of its energy needs, what I have come to understand is that if we could simply hit a switch to transition to “clean” energy (we can’t), even attempting to would cause widespread harm and injustice.
Therefore, industry must start being a bigger part of the solution and those of us who believe in achieving the fastest transition possible to a cleaner, healthier planet must start pushing for that goal not just from the outside, but from the inside, as well.
So, earlier this year, when I started seriously considering joining the Board of Directors of California Resources Corporation (“CRC”), a well-known oil and gas producer here in the Golden State, my eleven-year-old son’s opinion was one of the first that I sought out. Like so many young people these days, my son is concerned about climate change, and the impact science shows we are all having on this planet — and on his future.
“Why are you doing this, Mommy?” is a fair, and important, question. I’ve spent most of my career working for sustainability in the sectors of renewable energy, water, and food production. I am personally and professionally focused on helping our society meet the United Nations Sustainable Development Goals, which are crucial to leaving our children the kind of world they deserve. I’m currently running a company that’s built around those goals — Sustainable Development Acquisition Corp. — and that is the only pending B Corp and public benefit corporation of its kind. I believe that business can and should be a force for good, and that profit can and should be balanced with purpose. Not just because it’s the right thing to do, but because it’s the underpinning of financial sustainability for a business — and an extraordinary strategic opportunity.
At home, my family composts, tries to keep our showers short, and does our best to avoid single-use plastics. Nonetheless, I can’t pretend that fossil fuels aren’t a large part of my life and the global economy. My family and I take trips on airplanes. Our minivan runs on gasoline. And I’m keenly aware that the shipped boxes arriving at my house each week represent a sizeable carbon footprint. Despite the best intentions of so many working to shift to renewable energy, our global energy still predominantly comes from fossil-based fuels – and I know first-hand that California’s economy depends on natural gas-fired electric generation. So, how do we responsibly transition away from fossil fuels – and fast?
All we have is an off-ramp, and that ramp is still being built. I want to, and can, help make it as steep and short as society can bear. We need to reduce our emissions by, at minimum, 50% over the next decade, but we can’t leave anyone, or any company, behind. Fundamentally, we won’t get to significant reductions and net zero without changing the way all businesses operate, particularly those in the most emissions-intensive industries. Enter CRC, which has reached out asking for my help. I welcome the opportunity to help change CRC’s emissions profile and operating model from within and hope that our work together can become a model for the industry in a push to accelerate the energy transition this world so desperately needs.
And I believe that my son’s questions to me offer an important guide to approaching this challenge.
“Do they still produce oil & gas?”
Yes, CRC does produce oil and gas – and it will for some time. In fact, if you believe in resource efficiency and comparative advantage, these are probably the last oilfields that should be retired. They have low carbon intensity and are cheap, plentiful, accessible, local and heavily regulated by the State of California. California imports about 70%[2] of its oil and gas from foreign and out-of-state sources, which are often more emissions-intensive than these high-quality resources located in-state. CRC’s presence contributes significantly to California’s tax revenue and offers thousands of direct and indirect local jobs. Fortunately, the new leadership team and Board of Directors recognize its impact on society must be reduced, and that new sources of revenue must be established as we globally transition away from hydrocarbons. One of those streams could likely be carbon capture and sequestration, as CRC knows that it has some of the best carbon storage geology in California and can help lead the state towards its net-zero goals.
“Do they emit methane?” Isn’t that the worst?”
Methane emissions are terrible. One of the ways I can be helpful here is by working with CRC to move it towards near zero methane emissions by 2030. Fortunately, CRC is coming from a position of strength and will have achieved the World Bank’s Zero Routine Flaring by 2030 goal by the end of this year. It has already exceeded its original 2030 Methane reduction goal (from CRC, 2016) and has the lowest GHG emissions and GHG intensity from the production of the Top 100 US Oil and Gas producers.
Another topic that is near and dear to my heart, and expertise, is water. CRC is already a net water supplier to California and provided over 16,000-acre feet of water[3] to farmers for agriculture purposes in 2019 – a critical supply in drought years like we are now having. I think CRC can nearly double that amount by increasing its reuse and recycling activities by 2030.
“What are you going to do?”
I’m going to work with the current CRC Board to set new, specific, measurable targets and pursue The Climate Pledge to reach net-zero carbon by 2040 – with my hope, it hits net-zero on scope 1 &2 emissions by 2030 and scope 3 emissions by 2045. I intend to assist the board in establishing bold commitments from CRC, but also for upholding and increasing transparency and reporting around its progress.
CRC will need thought partners to help shape bold new plans and targets that match the challenges of California’s Net Zero decarbonization goals. With a new CEO this year and a newly created role of Chief Sustainability Officer reporting to the CEO, there is now a dedicated team with a budget that is focused on sustainability. I will be providing expertise on how to achieve those goals and I will work to further tie C-suite compensation to emissions intensity reduction and ESG targets.
The remainder of this year will be used to complete the following three critical tasks: 1) determine the decarbonization vision and pathway to net-zero, 2) define a carbon storage strategy and 3) kick-off the development of key solar projects.
“You promise?”
All I can do is my best, and hold CRC — and myself — accountable. My commitment to you is to report back in one year on the progress of the action plan. If CRC does not live up to making real and meaningful progress, I would consider donating my compensation to carbon offsets and would leave the board, but this opportunity to prove what is possible is too important to pass up.
[1] BP, 2020, Statistical Review of World Energy – 69th edition
[3] An acre foot of water is enough to flood a football field 1-foot deep
